When you trade your stop loss is probably fixed. But I have a question concerning the Take profit. Do you fix it too? or do you just ride the trade without knowing before when you are gonna stop? do you try to atain your take profit at all cost or do you change (take profit closer for exemple) according to the move. In short do you scalp like a robot with a Stop loss and Take profit alreaddy determined or do you let your feeling do the job? I am asking because I am starting to be profitable (forex market)but I let myself too much overwhelmed by my feeling, thinking i can feel the market and it seems I am making a lot of mistake this way (closing too early mostly). Sometimes it's turn ok as I am closing a trade in the positif that was gonna be negatif if I kept it longuer but sometimes I close and it continue going in the good direction..... So I am gonna test a strategy where everything is fixed before the trade and where I can not stop the trade before either my stop loss or take profit is touched....and I wanted to know what the profitable scalpers were doing themselve. Thanks in advance (and sorry for the english)
I just found out a lot of other threads speak about the same subject in this part of the forum. so feel free to let this subject die. I am gonna read the others threads
This was a problem for me for years, until I read Olsen's book. The critical thing to understand in scalping is the mean return for a given time-interval. If you capture a move as a scalper, you can't get greedy -- you need to scope your expectations to the distribution of returns for the time interval you are trading. Waiting for a two sigma move might not be practical.
I scalp GC and go based on momentum. I will enter on a burst and as soon as the move slows down I'm out. I mainly depend on the tape. So no, I don't have a predetermined exit or profit.
Could you elaborate on trading GC mostly by the tape. I also scalp GC, mainly trading reactions at S/R. I have not found the tape very helpful. Maybe you are seeing something I do not.
http://www.amazon.com/Introduction-High-Frequency-Finance-Michel-Dacorogna/dp/0122796713 Very mathy, but the part that's relevant is the "mean scaling law of returns"... He uses it for FX, but it's relevant to scalping. You can probably "search inside" the book on Amazon to read just that part.